Sell a really good, juicy burger on a fresh bun. Make perfect French fries. Don’t cut corners. That’s been the business plan since Jerry Murrell and his sons opened Five Guys Burgers and Fries in 1986. Today, there are 570 stores across the U.S. and Canada, with 2009 sales of $483 million. Though we weren’t able to coax out his secret recipe, Murrell shares with us five things that helped him expand one lone burger joint into a national franchise.
"Treat that person right, he’ll walk out the door and sell for you," Murrell says. "From the beginning, I wanted people to know that we put all our money into the food. That’s why the décor is so simple – red and white tiles. We don’t spend our money on décor. Or on guys in chicken suits. But we’ll go overboard on food."
Murrell says its important to make employee feel a sense of ownership—and accountability. "Boys hate to smile. It’s not macho. And it’s definitely not macho to clean a bathroom," he says of some employees. To motivate them, Five Guys employs secret shoppers called auditors, and ties pay to performance. "If the auditor walks in and the bathroom isn’t clean, that crew just lost money," Murrell says. "Next thing he knows, the guy who was supposed to clean the bathroom has toilet paper all over his car and a potato in his pipe."
"When we first started, people asked for coffee," Murrell says. "We thought, Why not? This was our first lesson in humility. We served coffee, but the problem was that the young kids working for us don’t know anything about coffee. It was terrible! We tried a chicken sandwich once, but that did not work, either. We do have hot dogs on our menu, and that works. But other than that, all you are going to get from Five Guys is hamburgers and fries."
"The magic to our hamburgers is quality control," Murrell says. "We toast our buns on a grill – a bun toaster is faster, cheaper, and toasts more evenly, but it doesn’t give you that caramelized taste. Our beef is 80 percent lean, never frozen, and our plants are so clean, you could eat off the floor. The burgers are made to order. That’s why we can’t do drive-thru’s – it takes too long. We had a sign: “If you’re in a hurry, there are a lot of really good hamburger places within a short distance from here.” People thought I was nuts. But the customers appreciated it."
"A lot of companies put 3 percent of their revenue toward marketing or advertising," Murrell notes. In contrast, Five Guys will collect "1.5 percent from all our franchisees and give bonuses to the crews that score the highest on our weekly third-party audits. The crews make about $8 or $9 an hour. If they get a good score, they will split another $1,000 among them, usually five or six people per crew. Last year, we paid out between $7 million and $8 million; this year, it will be $11 million or $12 million."